© Federal Statistical Office Germany, Roland Sturm, E 101 Business Register, Statistical Units A new statistical definition of the enterprise conceptional and practical implications Joint UNECE, Eurostat, OECD Meeting of Group of Experts on Business Registers Session „Economic globalisation and business registers“ 3. September 2013 Geneva Roland Sturm Federal Statistical Office, Germany

© Federal Statistical Office Germany, Roland Sturm, E 101 Business Register, Statistical Units Folie 2 the smallest combination of legal units that is an organizational unit producing goods or services, which benefits from a certain degree of autonomy in decision-making, especially for the allocation of its current resources. An enterprise carries out one or more activities at one or more locations. An enterprise may be a sole legal unit The current definition of the enterprise

© Federal Statistical Office Germany, Roland Sturm, E 101 Business Register, Statistical Units Folie 3 The current definition of the enterprise EN 1 EN 2 EN 3 EN 4 EN 1 EN 2 EN 3

© Federal Statistical Office Germany, Roland Sturm, E 101 Business Register, Statistical Units Folie 4 Findings about application (ESSnet Consistency): 1.No consistent application in Member States 2.Only 8 Member States employ the „complex enterprise“ 3.Mostly enterprises are seen equivalent to Legal Units 4.More and more use of administrative data The current definition of the enterprise

© Federal Statistical Office Germany, Roland Sturm, E 101 Business Register, Statistical Units Folie 5 Findings about reality: 1.Legal Units are not appropriate to delineate/identify economic actors 2.National borders lose relevance to delineate/identify economic actors 3.Autonomy defines  Enterprises 4.Market Activity is proxi for autonomy 5.Inside the enterprise often no market prices  meaningless for economic statistics

© Federal Statistical Office Germany, Roland Sturm, E 101 Business Register, Statistical Units Folie 6 an organisational market oriented unit which benefits from a sufficient degree of autonomy in decision-making. An enterprise carries out one or more activities at one or more locations. The enterprise can correspond to either a single legal unit not controlled by any other legal unit an enterprise group as a set of legal units under common control, or an autonomous part of an enterprise group The proposed definition of the enterprise

© Federal Statistical Office Germany, Roland Sturm, E 101 Business Register, Statistical Units Folie 7 Gains in preciseness market orientation, autonomy Differences concerning relations reference to enterprise groups instead of legal units splitting of legal units Loss of freedom Obligatory control relations (no complex enterprise without control relations) Current versus proposed definition

© Federal Statistical Office Germany, Roland Sturm, E 101 Business Register, Statistical Units Folie 8 an organisational market oriented unit which benefits from a sufficient degree of autonomy in decision-making. An enterprise carries out one or more activities at one or more locations. The enterprise can correspond to either a single legal unit not controlled by any other legal unit an enterprise group as a set of legal units under common control, or an autonomous part of an enterprise group The proposed definition of the enterprise – What is new? ! new

© Federal Statistical Office Germany, Roland Sturm, E 101 Business Register, Statistical Units Folie 9 The Global Enterprise (GEN) UCI GEN 1 GEN 2 GEN 3 GEN 4

© Federal Statistical Office Germany, Roland Sturm, E 101 Business Register, Statistical Units Folie 10 The Global Enterprise (GEN) and its national parts (TEN) FR DE US UCI GEN 1 GEN 2 GEN 3 GEN 4

© Federal Statistical Office Germany, Roland Sturm, E 101 Business Register, Statistical Units Folie 11 central positions: 1.GEN segregated in max 1 TEN per country 2.Legal Units can be active for more than one GEN 3.TEN „inherits“ the NACE of the GEN 4.For „national uses“ if needed: double classification The Global Enterprise (GEN) and its national parts (TEN)

© Federal Statistical Office Germany, Roland Sturm, E 101 Business Register, Statistical Units Folie 12 1.TEN are not autonomous 2.TEN are „random“ parts of enterprises 3.TEN are not defined from a „national“ point of view of statistics, but defined by the organisational structure of the enterprise (group) 4.Legal Units can be active for more than one TEN Implications from the concept of the TEN

© Federal Statistical Office Germany, Roland Sturm, E 101 Business Register, Statistical Units Folie 13 TEN application in national statistics FR DE US S - Sales/Marketing H - Human Resources T - Transport P - Production H - Human Resources M - Management H - Human Resources S H T P H H M GEN 1

© Federal Statistical Office Germany, Roland Sturm, E 101 Business Register, Statistical Units Folie 14 „The choice of the adequate statistical unit is to be determined by the goals of the respective statistical domain - and not the opposite“ (N. Rainer) FATS on basis of GEN? SBS on basis of GEN? Comparability of SBS for EU- and national level? National Accounts for member states or Europan Account – or World Accounts? Where to employ GEN and TEN?

© Federal Statistical Office Germany, Roland Sturm, E 101 Business Register, Statistical Units Folie 15 Why is the current concept of the enterprise not widely applied? Will the application of the GEN/TEN-concept be easier? Is the delineation of GEN/TEN structures by international cooperation (international profiling) workable? How to enforce respondence? How to combine the GEN/TEN approach with the use of administative data? How to employ GEN/TEN?

© Federal Statistical Office Germany, Roland Sturm, E 101 Business Register, Statistical Units Folie 16 Definition How we believe things are Operationalisation How we handle things in practice Definition should not restrict the possibilities of operationalisation Definition versus operationalisation

© Federal Statistical Office Germany, Roland Sturm, E 101 Business Register, Statistical Units Folie 17 Territory national – multinational - „global“ GEN/TEN is operationalisation! NEN, DEN, EU-EN, (…) is operationalisation! current definition is neutral proposed definition is neutral Definition versus operationalisation

© Federal Statistical Office Germany, Roland Sturm, E 101 Business Register, Statistical Units Folie 18 Profiling „A method to analyse the structure of an enterprise group in order to establish statistical units“ = operationalisation current definition allows Top-Down and Bottom-Up proposed definition enforces Top-Down  restricts operationalisation Definition versus operationalisation

© Federal Statistical Office Germany, Roland Sturm, E 101 Business Register, Statistical Units Folie 19 Legal Units as respondents: operationalisation as observation units: operationalisation as statistical units: ?? definition Current definition describes reality unsufficiently and may restrict operationalisation Proposed definition restricts operationalisation Definition versus operationalisation

© Federal Statistical Office Germany, Roland Sturm, E 101 Business Register, Statistical Units Folie 20 Legal Units An enterprise is… “the smallest combination of legal units or parts of legal units, …” would suffice definition and operationalisation Definition versus operationalisation

© Federal Statistical Office Germany, Roland Sturm, E 101 Business Register, Statistical Units Thank you for listening! Roland Sturm Telefon: +49 (0)

© Federal Statistical Office Germany, Roland Sturm, E 101 Business Register, Statistical Units EN 1 EN 2 EN 3 EN 4 EN 1 EN 3 EN 2 UCI GEN 1 GEN 2 GEN 3 GEN 4

© Federal Statistical Office Germany, Roland Sturm, E 101 Business Register, Statistical Units EN 1 EN 2 EN 3 EN 4 EN 1 EN 3 EN 2 UCI GEN 1 GEN 2 GEN 3 GEN 4

© Federal Statistical Office Germany, Roland Sturm, E 101 Business Register, Statistical Units EN 1 EN 2 EN 3 EN 4 EN 1 EN 3 EN 2 UCI GEN 1 GEN 2 GEN 3 GEN 4